MSFT: FBR Cuts FYQ1, Year View on Slowing PC Demand

By Tiernan Ray

FBR Capital‘s David Hilal, reiterating a Market Perform rating, and a $32 price target, cut his estimates for the fiscal Q1 ending this month and the full fiscal year, writing that demand for PCs appears to have deteriorated further this month.

Hilal now models full-year calendar 2012 PC unit growth of just 2%, down from his prior 4% projection.

With negative commentary from Intel (INTC) last week and consistent with our PC checks, PC demand appears to have worsened in the September quarter [...] As such, we are lowering our September quarter and FY13 estimates for MSFT based on lower Windows and Windows Live Division (WWLD) and Microsoft Business Division (MBD) revenues. While these issues may be partially offset by the Windows 8 GA in F2Q13 (October 26), we continue to take a wait-and-see approach on the prospects of the new operating system and its adoption among consumers and enterprises.

Hilal cut this quarter’s outlook to $16.8 billion and 60 cents from a prior $17.4 billion and 64 cents. For the full year, he now models $80.1 billion and $3 per share, down from $80.7 billion and $3.06.

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SEPTEMBER 14, 2012 7:38 P.M.

Robert Laughing wrote:

EVERYBODY HAS a PC/laptop and they simply do NOT need to replaced like they used to, every 3-4 years. Besides, as more and more gravitate to AAPL, with iPods, iPhones etc, they will USE an iPad or Mac Air far more frequently, once FB et al get their ACTS together. Woe be to MSFT and their once formidable cabal of RICO thugs.

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.